Petitioner saw Dr. Michael Katz on December 27, 1990 to obtain a second opinion. R. at 104. In a musculoskeletal medical report completed for the DSS, Dr. Katz diagnosed a malrotated atrophic non-union of the left humerus. Petitioner's range of motion at left elbow was 0-120 degrees, and he felt pain and tenderness at the fracture site. Dr. Katz assessed that petitioner was in need of open reduction, internal fixation and a bone graft. R. at 104. On March 4, 1991, Dr. Katz completed a disability form in which he checked boxes indicating that petitioner was house-confined, totally disabled for any occupation, and that his disability was indefinite. R. at 129.

Dr. K. Seo of the New York Diagnostic Centers performed a consultative examination of the petitioner on August 16, 1991. R. at 115-17. Dr. Seo noted that petitioner had no difficulty standing up from the sitting position on or off the examination table, and that his fine motor coordination of both hands was normal. Petitioner's left shoulder, elbow and wrist all displayed a normal range of motion. Muscle strength in petitioner's left hand rated four out of five. R. at 115. Dr. Seo noted that functionally, petitioner may have difficulty using his left arm. R. at 116.

On November 6, 1991, Dr. Katherine Gearity performed a consultative examination of the petitioner. R. at 119-23. Dr. Gearity observed no range of motion in the petitioner's left shoulder muscles, biceps, triceps, deltoids, or latissimus dorsi muscles. R. at 119. She opined that functionally, petitioner was unable to lift or carry any weight with his left arm. Petitioner's ability to push and/or pull was limited as a result of improper healing of the fracture. Dr. Gearity also noted that petitioner was emotionally and socially traumatized by the condition of his shoulder, which he had not used since his injury. R. at 123.

The Commissioner has promulgated regulations establishing a framework in which to evaluate disability claims. See 20 C.F.R. §§ 404.1520, 416.920 (1994). Essentially, a five-step analysis of the claimant's alleged disability is required:

First, the Secretary considers whether the claimant is currently engaged in substantial gainful activity. If he is not, the Secretary next considers whether the claimant has a 'severe impairment' which significantly limits his physical or mental ability to do basic work activities. If the claimant suffers such an impairment, the third inquiry is whether, based solely on medical evidence, the claimant has an impairment which is listed in Appendix 1 of the regulations. If the claimant has such an impairment, the Secretary will consider him disabled without considering vocational factors such as age, education, and work experience; the Secretary presumes that a claimant who is afflicted with a 'listed' impairment is unable to perform substantial gainful activity. Assuming the claimant does not have a listed impairment, the fourth inquiry is whether, despite the claimant's severe impairment, he has the residual functional capacity to perform his past work. Finally, if the claimant is unable to perform his past work, the Secretary then determines whether there is other work which the claimant could perform.

"The substantial evidence test . . . applies not only to the [Commissioner's] findings of fact, but also to the inferences and conclusions of law to be drawn from such facts." Smith v. Shalala, 856 F. Supp. 118, 121 (E.D.N.Y. 1994) (internal quotations omitted). There are limits, however, upon the extent to which a reviewing court may permit an ALJ's conclusion to be based upon an unarticulated finding of fact or analysis, for it is the function of the Commissioner, and not a reviewing court, to pass upon the credibility of witnesses, and to set forth clearly its findings which form the basis for its decision. See Ferraris, 728 F.2d at 588; Berry, 675 F.2d at 469; Vasquez, 632 F. Supp. at 1563-64 (citation omitted).

A. Analysis under Step Three of the Evaluation Process

The petitioner first contends that the Commissioner improperly evaluated the medical evidence concerning whether his impairment is of a type listed within Appendix 1 of the regulations for purposes of the third inquiry in the Commissioner's evaluation process. See Berry, 675 F.2d at 467. Specifically, petitioner argues that he is per se disabled because his ailment meets the criteria set forth under 20 C.F.R. § 404, Subpart P, App. 1, § 1.12, which provides coverage for:

Fractures of an upper extremity with non-union of a fracture of the shaft of the humerus, radius, or ulna under continuing surgical management directed toward restoration of functional use of the extremity and such function was not restored or expected to be restored within 12 months after onset.

20 C.F.R. § 404, Subpart P, App. 1, § 1.12. "Listing 1.12 requires, in sum, that a claimant's impairment meet or equal the following criteria: (1) a non-union of a fracture; (2) functional limitations of 12-month duration or expected duration; and (3) continuing surgical management." Davis v. Shalala, 862 F. Supp. 1, 6 (D.D.C. 1994). In connection with this inquiry, petitioner claims that Dr. Gerwin, his treating physician, attested that he suffered from a non-union fracture of the left humerus and that surgical management had not yet restored functioning. The petitioner also asserts that, under 20 C.F.R. § 404.1527(d)(2), Dr. Gerwin's opinion as a treating physician should be controlling as it is well supported and not inconsistent with other substantial evidence.

The following facts would appear to be relevant in determining whether the petitioner satisfies the criteria for being under "continuing surgical management."

(1) In September 1989, petitioner fractured his left arm. R. at 109, 155.

(2) In April 1990, Dr. Fishman recommended surgery, and referred the petitioner to another orthopedist for such procedure. R. at 109.

(3) In December 1990, Dr. Katz provided a second opinion which concurred with Dr. Fishman's recommendation of surgery. R. at 104.

R. at 16 (emphasis added). The ALJ further held, as his "third finding," that the claimant "does not have an impairment or combination of impairments listed in, or medically equal to one listed in Appendix 1, Subpart P Regulations No. 4." R. at 19. Unfortunately, the ALJ's written decision does not set forth the reasoning that he employed in reaching this conclusion.

In affirming the ALJ's decision, and rejecting the claimant's contention that the ALJ incorrectly found his impairment not to be within the purview of Listing 1.12, the Appeals Council chose not to discuss the ALJ's written decision. Instead, the Appeals Council referred to the ALJ's tentative finding, stated on the record at the hearing, see R. at 174, that this case did not involve "continued surgical management." R. at 2. At the hearing, the ALJ concluded his discussion of this matter with the following remarks:

It's not under continuing surgical during this period. I . . . disagree with that. I . . . can understand it. I understand the circumstances, too. But still -- I will take it into account.

R. at 174 (emphasis added). In support of its position, the Appeals Council noted that only one surgical procedure had been performed upon the petitioner, and that this procedure was not performed until more than three years after he fractured his arm. The Appeals Council further observed that during a significant portion of that time, the petitioner was not under medical treatment. Consequently, the Appeals Council found that the ALJ properly concluded that his "impairment is not of the severity described in section 1.12 of the Secretary's Listing of Impairments." R. at 2.

The Court regards both the ALJ's and the Appeals Council's analysis of the petitioner's circumstances, and specifically, the nature of his treatment that ultimately culminated in surgery, to be insufficient to support the conclusion that the Commissioner's determination is supported by substantial evidence. See Richardson, 402 U.S. at 401, 91 S. Ct. at 1427. Indeed, in summarily concluding that a gap in medical treatment undermines a finding of "continuing surgical management," the Commissioner fails to consider, among other things, the following issues:

(1) The definition of "surgical management," and whether under the claimant's circumstances it may be appropriate to regard his consultative examinations as a part thereof given that he was previously recommended for surgery;

(2) The period of time that must elapse in order for "surgical management" to be regarded as "continuing;"

In accordance with the foregoing analysis, this matter is remanded to the Commissioner for further appropriate proceedings, with specific instructions provided herein concerning the third and fifth steps of the Commissioner's evaluation process.

SO ORDERED.

Joanna Seybert, U.S.D.J.

Dated: Uniondale, New York

July 20, 1995

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